USD/CAD - Daily Candle Chart 5th March 2009

USD/CAD - Daily Candle Chart 5th March 2009

Well, yesterday was a surprise and not a pleasant one either – I hope you managed to avoid being stopped out in the wide spread down bar that followed the fundamental news of yesterday, and it seems that the resistance level at 1.300 is proving a difficult nut to crack. This morning’s early trading would suggest that the pair will have another run at this level, but I would suggest from the failure yesterday, that until it is breached, then it may be wiser to wait before opening a long position. With three failed attempts to move higher in the last few months, a fourth would not be a great surprise, and with the bearish engulfing signal from yesterday, this could be the first signal of yet another failed break above this level.

The fundamental news this afternoon in Canada is from the Richard Ivey School of Business, who provide a diffusion index based on a survey of purchasing managers (PMI), and is generally considered to be a leading indicator. The index is based on a survey of about 200 purchasing managers, which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. If the actual is better than forecast then this is generally considered good news for the home currency, in this case the Canadian dollar. The forecast is for a figure of 37.5 against a previous of 36.1, with any number lower than 50 indicating an economy in contraction. The economic news in the US has already been released with the Unemployment Claims coming in at 639,000 against a forecast of 645,000 , so slightly better than expected. All the other news is covered for you in the latest currency news or the live news feed.

The short term and medium term outlook is sideways, the long term is bullish.